Document of

The World Bank

FOX OMCIAL USE ONLY

C~ R. Gt) -S o

Repor No. i-4189-SO

4.f

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED SDR 4.1 MILLION CUSA4.3 MILLION) CREDIT

TO THE

SOMALJ4DEMOCRATIC REPUBLIC

FOR A

LIVESTOCK HEALTH SERVICES PROJECT

December 12, 1985

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CURRENCY AND EQUIVALENT UNITS

Somali Shilling (So.Sh.) = 100 centsUS$1.00 = So.Sh. 42.00 (November 1985)

WEIGHTS AND MEASURES

1 Hectare (ha) = 10,000 m2

I Square Kilometer (kmn2 ) = 100 ha1 Metric Ton (mt) 1,000 kg

ABBREVIATIONS

AMED = Animal Health Department of MLFRAU = Animal UnitsCBPP = Contagious Bovine PleuropneumoniaCCPP = Contagious Caprine PleuropneumoniaCRDP = Central Rangelands Development ProjectFAO/IC = Food & Agriculture Organization/Investment CentreFYDP = Four-Year Development Plan (1982-86)GOS = Government of SomaliaGZ = German Technical AssistanceXCB = International Competitive BiddingIDA = International Development AssociationIFAD = International Fund for Agricultural DevelopmentIRC = Inter-Regional CommitteeL/C = Letter of CreditLCB = Local Competitive BiddingM = MillioniMLFR = Ministry of Livestock, Forestry & RangeMTR = Mid-Term ReviewNRA = National Range AgencyNRA1DP = Northern Rangelands Development ProjectODA = Overseas Development Agency of UKPC = Project CommitteePMU = Project Management UnitPPF = Project Preparation FacilitySOE = Statement of ExpenditureUSAID = United States Agency for International DevelopmentWFP = World Food Program

FISCAL YEAR

January 1 - December 31

FOR OMCIAL USE ONLY- i -

LIVESTOCK HEALTH SERVICES PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: Somali Democratic Republic.

Beneficiary: Ministry of Livestock, Forestry and Range (MLFR)

Amount: SDR 4.1 million (US$4.3 million equivalent)

Terms: Standard

Co-Financing: SDR 5.9 million loan (US$6.3 million equivalent)from the International Fund for Agricultural Development(IFAD).

Project Description

Objectives:

(a) To reduce economic losses in the livestock sector. Theimmediate objectives would be to assist MLFR in (i) defining acomprehensive and economically justifiable animal diseasecontrol program for Northern SomalFa and (ii) testing such adisease control program on an operational scale. The projectwould strengthen the Animal Health Department (AHND) of MLFR.

(b) The project would be complementary to ongoing projects inanimal health. It would serve as a basis for planning furtherimprovements in veterinary services.

Components: Part A: disease investigation and livestock health servicesplanning over a six and a half year period concentrated on thefirst three and a half years (Phase I). Part B: pilotprogram for disease control during the second half (Phase II)of the project. Components: laboratory services at Hargeisa

- and Burao; field services - investigation; field services -development; project management; and training.

Benefits: Not quantifiable at present. Costs and benefits of animalhealth services would be quantified during the first threeyears of the project. Production benefits would come fromreduced mortality and morbidity with improved rates ofreproduction and growth. Main economic benefits would derivefrom increased exports.

Thisdbnument hmsa retioteddLsuibuton and may be used bymipentsonloy inthe perfonmaneoftheirofrw duties. Its contents nay nototherwisebedisdodsedwthout World Bank authorization.

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Risks: Some border area may be insecure. It may be difficult tomonitor herds crossing borders, and data may be lost.Qualified counterparts may be difficult to retain. Soms staffincentives and facilities may help to attract and retainqualified staff. Uncertain market outlets and reducedlivestock offtake could jeopardize the range. GOS isexploring alternative markets and range monitoring would be aproject component. The USATD Marketing and Realtb Project isdesigned to reduce such risks. PKU would maintain closecontact with the USAID project through the Project Committeein MLFR.

Cost Estimates 1/ Local Foreign Total=-~~ (US$ million)-

Laboratory Services 0.1 1.1 1.2Field Services: Investigation (Phase I) 0.4 2.4 2.7Field Services: Development (Phase II) 0.2 3.2 3.4Project Management 0.1 1.4 1.5Training - 0.1 0.1

Subtotal 0.8 8.2 8.9

Physical Contingencies - 0.2 0.2Price Contingencies 0.2 2.3 2.5

Total Project Costs 1.0 10.6 11.6

Proposed Financing Plan

IDA Credit - 4.3 4.3IFAD Loan - 6.3 6.3Government of Somalia 1.0 - 1.0

Total 1.0 10.6 11.6

Estimated IDA Disbursements (US$ Million)

IDA FY 1987 1988 1989 1990 1991 1992 1993

Annual 0.9 0.7 0.8 0.6 0.5 0.4 0.4Cumulative 0.9 1.6 2.4 3.0 3.5 3.9 4.3

Economic Rate of Return: None calculated.

Man: IBRD No. 19008

1/ Totals may not add due to rounding.

INTERNATIONAL DEVELOPMENT ASSOCIATIONREPORT AND RECOMMENDATION OF THE PRESIDENT

TO THE EXECUTIVE DIRECTORSON A PROPOSED DEVELOPMENT CREDITTO THE SOMALI DEMOCRATIC REPUBLIC

FOR A LIVESTOCK HEALTH SERVICES PROJECT

1. I submit the following report and recommendation on a proposeddevelopment credit to the Somali Democratic Republic for SDR 4.1 million(US$4.3 million equivalent) on standard IDA terms to help finance aLivestock Health Services Project. The International Fund for AgriculturalDevelopment (IFAD) will cofinance the program with a loan of SDR 5.9million (US$6.3 million equivalent). The IFAD loan will carry a servicecharge of one percent annually, with a maturity period of 50 years,including a 10 year grace period.

PART 1 - THE ECONOMY

2. A report on the economy entitled: 'Somalia - Towards EconomicRecovery and Growth (Report No. 5584-SO) was distributed to the ExecutiveDirectors in August 1985.

The Resource Base

3. Somalia is a large, sparsely populated country; its variedtopography includes a hot and arid coastal plain, rugged mountains andplateaus, and lowlands of varying fertility and rainfall. Its populationof about 5.3 million is unevenly distributed over a land area of nearly638,000 sq km of semi-desert. Population growth in recent years has beenabout 3 percent (excluding refugee inflows) which will result in long-termpressure on the fragile resource base. Only aoout 13 percent of the landis suitable for cultivation, but with watez the main constraint, only asmall fraction (8.5 percent) of this potentially arable land is cultivated.

4. The mainstay of the economy has long been nomadic pastoralism.About 50 percent of the population are nomads and semi-nomads who depend onlivestock for their livelihood. Livestock production accounts for about 40percent of GDP and provided, until recently, over 80 percent of exportearnings. Crop production generates about 10 percent of GDP.

.

5. Apart from the traditional export of livestock, commercialagriculture is centered mainly on the production and export of bananas andthe production of sugar, sorghum, and maize for the domestic market.Expansion of the manufacturing and service sectors is limited by the smallsize of the domestic market, poor infrastructure, and shortages of capitaland entrepreneurial experience. The existence of several minerals has beenconfirmed, but their exploration is still at an early stage.

6. A number of foreign companies have been engaged in onshore andoffshore exploration for hydrocarbons but so far no commercially viable oilprospects have emerged. Investigations for natural gas, under an IDA

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credit, have proved disappointing. In the absence of other known resources,Somalia's prospects depend upon agricultural and livestock development,whose progress will depend upon careful management of the scarce land andwater resources, and improvements in animal health.

7. Somalia is among the poorest countries in the world and iscIlassified by the United Nations as a least-developed country. Per capitaincome was estimated at $265 in 1982. Other indicators of the country'slow level of social and economic development include: a crude death rateestimated at 20 per thousand population (compared to a crude birth rate of50 per thousand); an average life expectancy of only 45 years; an infantmortality rate as high as 142 per thousand population; primary andsecondary school enrollment ratios of 30 percent and 11 percent,respectively; and a ratio of nearly 16,000 persons per physician.

Past Development Strategy and Performance

8. Following its assumption of power in 1969, the Government adheredto a program of "scientific socialism' whose stated objectives wereegalitarianism and social justice, development through the public sector,nationalization of certain foreign enterprises, and the formation ofcooperatives. Public ownership and management expanded both throughnationalizations and through the creation of new public enterprises. Theparastatal sector established in the 1970s included about 45 autonomousagencies which eliminated private enterprise in wholesale trade andbanking, and which dominated manufacturing.

9. In the early 1970S Somalia made considerable progress in meetingcertain basic needs. A program of literacy and primary education hadnotable results, and an effective system of food distribution was alsoestablished. In other respects, however, the record in the social sectors

-has been less impressive, particularly in water supply, sanitation andhealth, where services have frequently been biased in favor of the urbanpopulation. Moreover, there are indications that there has been a trendtowards increasing income differentiation within the rural sector.

10. During the 1970s the Somali economy experienced stagnation inproduction and a decline in per capita income. Only the services sectorgrew during the period, by 3.5 percent per year and the growth ingovernment services, at an annual rate of about , percent, was particularlystriking. Beginning in 1981, the economy witnessed a reversal of the pasttrend, with real GDP in 1981-82 growing on average by 6.4 percent per yearnotwithstanding some decline in the services sector.

11. Over 100,000 Somalis have migrated to work in the Gulf area,which has led to severe depletion of Somalia's already small stock ofqualified and skilled manpower. The savings of these emigrants arepotentially an important resource for the economy, but despite substantialadjustment of the exchange rate, only a small proportion of emigrants'savings is remitted, largely through unofficial channels.

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12. Following a border conflict with Ethiopia in 1977/78, there was agreat surge in Government expenditures which resulted In widened deficitsin boLla the budget and the balance of payments. During 1978-80, theGovernment's financial situation deteriorated rapidly, mainly because ofthe sizeable expansion in expenditures consequent upon the border conflict,the cost of maintaining large numbers of refugees, and the wage billassociated with the Government's policy of guaranteeing employment forsecondary school leavers. At the same time, official foreign aiddeclined. This resulted in Government recourse to deficit financing. Withfurther deterioration in the budgetary situation in 1979 the Government'srecourse to the Central Bank rose to record levels (about 13 percent ofGDP). This, in turn, led to rapid inflation, from 10 percent in 1978 to 60percent in 1980.

13. Official data on Somalia's balance of payments are incomplete,but it seems that the country had a reasonably comfortable overall balanceof payments position up to the beginning of 1979. The stagnation inexports and surge in imports since 1979 resulted in a widening of both thecurrent and overall balance of payments deficits. The current accountdeficit during 1980-83 averaged $290 million, as compared to $110 millionin the years 1977-78. Total international reserves, which rose steadily inthe 1970s to $158 million in March 1979, dropped to $15 million at the endof December 1980, and have since dwindled to nearly zero.

14. The stagnation of export earnings and the near zero level ofdomestic savings have rendered Somalia entirely dependent upon externalassistance for the financing of development. After joining the Arab Leaguein 1974, Somalia mounted a successful effort to attract funds from the Arabpetroleum exporting countries. After 1977, the sources of foreignassistance shifted from the centrally planned economies (except for thePeople's Republic of China, which maintains a large program) towards Arabbilateral and multilateral institutions and OECD countries, several ofwhich have had substantial assistance programs for a number of years.According to OECD data, Somalia's receipts of ODA during the period1980-1982 averaged nearly $400 million per year, equivalent to some $75 percapita per year.

15. Somalia's external debt burden has grown rapidly in recent yearsand amnunted to about $1.4 billion at end 198&. The structure and terms ofborrowing have also hardened. The debt service ratio in terms ofobligations rose from 7 percent in 1979 to nearly 50 percent in 1983 and isprojected at about 100 percent in 1986. The country also has accumulateddebt service arrears. The problem of arrears has not been fully resolvedby the debt rescheduling at the Paris Club in March 1985. IMF and WorldBank staff have encouraged the Government to seek further debt relief wherepossible on concessional terms.

Policy Changes

16. As the financial crisis deepened through 1978-1980, theGovernment became convinced of the need to take remedial action andembarked on a course of moving towards a more market-oriented economy.

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Beginning in early 1981, the Government successfully implemented twosuccessive stabilization programs supported by INF standby arrangements.The measures taken under these programs included adjustment of the exchangerate, fiscal and monetary restraint, and significant liberalization ofagricultural marketing. Under the first standby program, a dual exchangerate was introduced, producer prices for agricultural crops were increased,and banana growers received the full benefit of devaluation. This programalso involved a substantial reduction in Government recourse to the bankingsystem and increased interest rates.

17. Following the completion of the 1981/82 program, a newstabilization program was adopted in mid-1982, supported by the IMF with anSDBR 60 million 18-month standby arrangement for the period July1982-December 1983. The dual exchange rate was unified on July 1, 1982,the Somali shilling was again devalued, interest rates were raised, andfiscal and monetary expansion was restricted. In January 1983, a bonusscheme was introduced providiag for a premium of 25 percent in foreignexchange terms of inward remictances and capital inflows by Somalinationals. In mid-1983, a more flexible exchange rate system wasintroduced whereby the Somali shilling was pegged to the SDR adjusted bythe relative rates of inflation between Somalia and the five countries Inthe SDR basket. However, the beneficial effects of these measures wereovershadowed by the negative impact of a ban on Somali cattle imports bySaudi Arabia (which has been in effect since May 1983) and by the impact ofa drought that began in 1983 and continued into 1984.

18. The Government decided in 1983 to abandon its policy ofguaranteed employment to high school leavers. The Government is in theprocess of determining which public enterprises should be phased out ofoperation, which privatized, and which retained in the public sector.Another step to liberalize the economy was the de facto elimination of theGovernment monopoly on grain purchases.

19. The policy reforms introduced by the Government from 1981-83 hada positive impact on the economy. Reductions were effected in the rate ofgrowth of the money supply, in Government recourse to the banking system,and in the rate of inflation. There was also some increase in commodityproduction and exports. These measures represented the first stage in theformulation and implementation of a policy agenda directed at restoringfinancial equilibrium, rehabilitating andJmaking fuller use of existingagricultural and industrial productive capacity, and establishing thefoundations for long-term growth.

20. In March 1983 the Government requested the Bank to organize a 4

first Consultative Group Meeting for Somalia. It prepared a Medium-TermRecovery Program (MTRP) for the Consultative Group Meeting, consisting of(i) a program of phased policy measures aimed at restoring equilibrium inthe balance of payments and public finances and at rationalizing thepricing and incentive structure; and (ii) a resource-constrained PublicInvestment Program (PIP) for the period 1984-86. The formulation of thisrecovery program represented a major accomplishment.

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21. The inaugural meeting of the Consultative Group for Somalia washeld in October 1983. Participants were encouraged by the remedial policymeasures taken by the Government of existing facilities. They welcomed inparticular the substantial adjustments made by the Government in the sizeand composition of the investment program at the Consultative GroupMeeting. These adjustments included postponing some new projects pendingresults of new studies, rephasing the implementation of ongoing projectsand introducing new high-priority schemes such as the rehabilitation ofirrigation in the Shebelli region. It was recognized at the meeting thatfurther financial aid to Somalia should be on highly concessional terms andthat Somalia should attempt to secure debt relief on concessional terms.

22. Following the Consultative Group Meeting, intensive discussionsbetween the Government and donors were held concerning follow-up action onthe development of the Juba Valley, including the proposed Bardhere Dam,and agreement was reached with the Bank on terms of reference and atimetable for a study of interim water solutions, financed under the firstIDA Technical Assistance Credit. A USAID financed Civil Survice Study hasbeen reviewed by the Government and arrangements for follow-up are beingmade.

Recent Developments

23. After having improved markedly between mid-1981 and late 1983, in1984 the Somali economy came under increasing stress, due to (i) the acuteshortage of foreign exchange due to the fall in livestock exports; (ii) adrop in domestic food production owing to a drought in 1983 and thelateness of rain in early 1984; and (iii) the March 1984 governmentdecision not to implement additional policy measures for exchange rateadjustments and financial restraint under an IMF program. Following thebreakdown of the stabilization program, the exchange rate in the parallelmarket fell steeply. In addition, there was a sharp acceleratior inmonetary expansion, fueled largely by a rapid expansion in net credit tothe Government. Domestic inflation rose from 32 percent in 1983 to over 90percent in 1984.

24. As the economy deteriorated, the Government came to realize the needfor new corrective measures. Following an IMF mission and a parallel Bankmission in early September 1984, the Government adjusted the exchangerate. During the 1984 Bank/Fund Annual Meeting discussions, the Ministerof Finance reiterated Somalia's commitment to a recovery programemphasizing development of the productive sectors, rehabilitation and fullutilization of existing capacities, and encouragement of the privatesector. The Minister also confirmed the Government's decision to reopenits dialogue with the IMF.

25. In connection with the design and negotiation of the Stand-byArrangement, Bank staff reviewed the Government's draft Public InvestmentProgram (PIP) for 1985; following some adjustments by the Government, Bankstaff infor-med the IMF staff that it considered the PIP broadly consistentwith the country's development needs and objectives. Major policy actionsincluded: (a) devaluation of the Somali shilling by almost 50 percent and

introduction of a free foreign exchange market for nearly all privatesector transactions; (b) abolition of price controls; (c) restrictiou ofcredit and severe fiscal limits; (d) civil service staff reductions; (e)arrangements to improve debt management and regularize Somalia's relationswith creditors; (f) increases in interest rates; and (g) public enterprisereforms.

26. On January 1, 1985 the Government implemented nearly all thepreconditions to the IMF Stand-by program. These included a freelyfloating system for the determination of the market exchange rate for mostprivate sector transactions, and virtual elimination of all traderestrictions. On a transitional basis, an official exchange rate forgovernment transactions has been maintained. The official exchange ratewas devalued by 38 percent in domestic currency terms and is to be adjustedeach month by the difference between domestic and international inflationplus an additional 0.5 Somali Shillings per US dollar.

27. On January 23, 1985 a special meeting of the Consultative Groupfor Somalia was held to mobilize financial support for the country'sbalance of payments in 1985. At this meeting about US$80 million werecommitted in additional support for 1985. Subsequently, the IMF Boardapproved, on February 22, 1985, an SDR 22 million Stand-by Arrangement anda SDR 33 million Compensatory Financing Facility. At a meeting of theParis Club on March 4, 1985, Somalia was accorded a rescheduling of itsdebts (arrears and principal) by its major OECD-member creditors. Thesecond meeting of the Consultative Group was held on November 5 and 6,1985, to review Somalia's 1986-88 Public Investment Program, medium-termprospects, and aid requirements.

28. The Consultative Group reviewed the requirements of aiddisbursement for 1986 and concluded that about US$430 million of externalassistance needed to be provided, through a combination of project aid,commodity aid, cash aid and debt relief; debt relief would have toconstitute about one-fourth of the total, and cash and commodity aidtogether one-third. Members indicated their continued support forSomalia's program through significant amounts of project and non-projectaid for 1986 and the ensuing years, and confirmed the need for broadlybased debt relief.

PART II - BANK GROUP OPERATIONS IN SOMALIA

29. Bank Group commitments to Somalia to date total US$247 million,consisting of 28 IDA credits and two IFC investments. Thirteen projectsa-e under implementation. Over thirty percent of total IDA lending hasbeen for agriculture, twenty five percent for transport and the rest aboutequally divided over education, water supply, ports, energy, industry andtechnical assistance. An agricultural inputs program was approved in FY85.IFC has so far made two investments in Somalia -- a US$375,000 loan for amolasses terminal for the Juba Sugar Project and SWF 1,550,000 for apolypropylene bag project.

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30. Physical progresa in implementing development projects in Somaliahas boen mixed, and saoe have not done well. Progress of the North WestRegion Agricultural Development Project - Phase I has been good, and themaln production targets estimated at appraisal have been met or exceeded.Projects for roads, ports, water and education have been more successfulthan in the agricultural sector. Many IDA-financed projects haveexperienced delays in execution. Staffing and management problems haveimpeded effective preparation and implementation of projects.

31. Somalia's disbursement performance on projects assisted by theBank Group has been satisfactory. The FY85 disbursement rate ms 33.5percent, as compared to 21.9 percent for Eastern and Southern Africa and22.0 percent Bank/IDA-wide.

IDA Strategy

32. In early January 1985 the Government implemented far-reachingpolicy reforms to liberalize the Somali economy and to improve itsmacroeconomic management. We propose to continue to assist the Governmentto devise and implement policies and programs to improve the efficiency ofboth the public and private sectors, to improve the macroeconomic frameworkfor domestic and external resource mobilization and allocation, improvepricing administration and marketing systems, and to increase productionand exports. We aim to support further use of existing capacity and tohelp lay the foundations for longer term growth. Issues in publicenterprise reform are expected to become an increasingly importantcomponent of our policy dialogue.

33. We are giving particular attention to aid management issues, andhave undertaken an assessment of technical assistance to Somalia jointlywith the UNDP. An energy assessment has been completed, as has a review ofpopulation, health and nutrition issues. A collaborative review with theGovernment and donors of major issues in the agricultural sector is underway with support from an SPPF. We are cooperating with the government inthe preparation and review of periodically updated public investment andexpenditure programs, at both the global and, increasingly, at the sectorlevel. The Advisory Committee for Juba Valley Development established bythe Consultative Group at its October 1983 meeting provides an importantforum for review and collaboration on issues affecting the development ofSomaliast major water resource.

34.- In our lending work, we plan to emphasize productive investmentsand rehabilitation programs. An irrigation rehabilitation project is beingprepared to help increase productivity and farmer incomes in the ShebelliValley. Most projects have been cofinanced with a number of other donors,and this is expected to continue in the future. For example, an IDAcommodity import program is being cofinanced by a grant from FederalRepublic of Germany, and IDA administers additional commodity assistance onbehAlf of Italy. Our economic and sector work program strives to supportthe macroeconomic reform process, and to provide analytical inputs for thework of the Consultative Group for Soalia.

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Relationship to Other Aid Flows

35. IDA disbursements represent about eight percent of total aidflows to Somalia. We expect that this relationship will continue at aboutthe same level during the next several years. IDA obligations representabout 12 percent of Somalia's total outstanding and disbursed debt up toDecember 31, 1983. Debt service payments to IDA represent a very smallproportion of Somalials total debt service obligations. In 1984, paymentsto IDA were estimated at only about one percent of total debt servicepayments for that year. This trend is expected to continue in the future.

PART III - THE LIVESTOCK SUB-SECTOR

Background

36. The total livestock population was estimated to be about 40million animals in 1984 of which over 70 percent were sheep and goats.Nomadic pastoralism is the predominant form of livestock productionaccounting for about 80 percent of livestock ownership and providing alivelihood for about 50 percent of the human population. Noepidemiological studies of mortality and morbidity rates have been carriedout, but they are believed to be high especially among young stock. Roughestimates show losses from all causes to be about 4.5 million sheep andgoats, 400,000 cattle and 460,000 camels a year.

37. The annual offtake or production in the livestock sector varieswidely with geography and climate, and has been estimated to be about 3.5million animals of which 1.9 million would be goats, 1.2 million sheep, 0.2million cattle and 0.2 million camels. About two-thirds of the totalproduction is marketed. Export data suggest an increase in offtake overthe last 25 years. The main driving force behind this expansion has beenthe increasing commercialization of nomadic livestock herding, pulled by abuoyant market in Saudi Arabia for goats and sheep since the late 1960s.This market has, however, in recent years been severely disrupted.Competition from better organized suppliers has intensified and Saudiconsumers are now less willing to pay substantially higher prices forSomali stock. In 1983 Saudi Arabia banned imports of cattle and smallruminants from East Africa on grounds of the risk of disease. The cattleban remains in force, and exports of small stock have, despite the liftingof the ban on small ruminants, not recovered to former levels. Theprospects of Somalia recovering its Saudi market share are highlyuncertain. GOS has made some efforts towards diversifying its markets. AUSAID-funded Livestock Marketing and Health Project, which started late1984, focuses on upgrading quarantine and related export facilities to meetinternational trade requirements and on improving the health program forcattle exports. Through marketing studies, it is expected to assist GOS inimproving the livestock marketing system and developing a cattle exportmarketing strategy.

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38. Official exports are subject to export licensing and to a systemof letters of credit (L/C) under which GOS specifies an L/C value per headwhich is below the actual dollar value realized by the sale. The L/C valueis repatriated at the official exchange rate while the exporter is free torepatriate the remainder at the open market rate or to purchase goodsabroad for resale in Somalia. The high official valuation of the Somalicurrency, in conjunction with the L/C system,, results in a high rate ofimplicit taxation on the sub-sector, anounting, at the time of appraisal,to about 40Z on gross earnings in the case of small rminants. It isexpected that the impact of this taxation on export incentives and the needfor a revision of Government policy regarding the L/C system will bereviewed under the marketing studies scheduled to be carried out under theUSAID-assisted Livestock Marketing and Health Project.

Government Policy and Ilstitutions

39. The Government assigns the highest priority for livestocksubsector development to a reduction of waste caused by disease and tosubsequent increases in offtake, exports and foreign exchange earnings.Other priorities include range development and preservation, and productiondiversification with a strong emphasis on private sector Involvement.Efforts to improve animal health through enhanced disease control measuresneed to be balanced with available animal feed resources. Hence theNorthern and Central Rangelands Development Projects aim at increasing theproductivity of rangelands to accommodate increased livestock production.Furtheruore, under the USAID assisted Livestock Marketing and HealthServices project, special provisions are included for expansion of privatesector fodder production.The Ministry of Livestock, Forestry and Range (MLFR) is the Governmentagency concerned with the development of the livestock subsector. TheAnimal Health Department (AnD), the largest MLFR department, is responsiblefor all aspects of animal disease control including field vaccination andtreatments, the distribution of drugs and medicine, and central andregional veterinary laboratory services.

Issues in Animal Disease Control

40. Although subsector objectives emphasize reduction in economicwaste caused by disease, the strategies and programs to accomplish thisobjective are poorly defined. In the absence of well-defined diseasecontrol programs, the veterinary services of AHD lack focus and guidance,and the links between field and laboratory services remain weak. Effectiveplanning of veterinary interventions is impeded by a lack of understandingof current levels of mortality and morbidity caused by animal diseases.The major issue in livestock health improvement is therefore the absence ofwell-defined and regionally oriented disease control programs which areeconomically justifiable, and monitored as to their effectiveness. Thisissue requires consideration of the appropriate roles of public and privatesectors in the delivery of veterinary services and recovery of publicsector expenditures to sustain such programs. Strengthening of thetechnical and organizational base for animal health planning is animmediate priority. The proposed project would address this need as itrelates to northern Somalia.

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41. The monopoly on animal drug importation and distribution strainsthe Government s foreign exchange resources while failing to tap theresources of the private sector in meeting the drug demand. The Governmentrecognizes the need for privatization of animal drug importation anddistribution. A study to examine the feasibility and organizationalaspects of involving the private sector in drug distribution is beingplanned under the USAID-assisted Livestock Marketing and Health Project.Furthermore, under the IDA-financed Agricultural Inputs Program, GOS hasagreed to authorize approved dealers to import and distribute specifiedanimal drugs. The proposed project would closely follow these activities.

42. Insufficient attention has been given in the past to theimplications of the limited feed resources of the range and the increasesin livestock numbers that might result from an effective disease controlprogram. Any such increase in livestock numbers, without a commensurateincrease in offtake sustained by an assured demand for consumption of meat,would be counterproductive and exacerbate the already precarious feedsituation and risk of increased losses from starvation in droughtsituations. The proposed project acknowledges the need to plan, implementand monitor a disease control program for northern Somalia whilemaintaining the sustainability of the range resources and market offtake.

Bank Group and Other Donor Roles in Livestock Subsector

43. Since the early 1970s, a series of internationally fundedprojects supporting Government strategy have been initiated. Theseprojects, however, reflected an initial emphasis on the establishment ofintensive public sector livestock production systems. Cost overruns,delays, management and technical problems, input shortages and low level ofoutput led to a lack of support for this approach. Attention was thenfocused on the management of critical range resources, involving two largeprojects-the Northern Rangelands Development Project, financed by theKuwait Fund for Arab Economic Development, and the Central RangelandsDevelopment Project, supported by multidonor financing including IDA.Ongoing projects partially addressing livestock health issues include:(i) the Bay Region Agricultural Development Project (involving IDAfinancing) with a component, funded by USAID, to upgrade veterinaryservices in the region; (ii) the Tsetse Fly Control Project (ODA supportedsince 1977); (iii) the veterinary component of the Central RangelandsDevelopment Project financed by the Federal Republic of Germany; and mostrecently (iv) the Livestock Marketing and Health Project (USAID funded,1984).

44. The efforts at development of the livestock subsector have metwith mixed but generally limited success. Cost overruns, drought andborder conflicts have caused severe setbacks. Large project size and area,complexity of project activities and inadequate baseline data are factorsfound to have contributed to implementation difficulties. Dependence onlarge-scale construction programs, poor project management and fieldsupervision, lack of necessary project inputs and lack of interaction withnomadic beneficiaries are additional factors. Sustainability ofdevelopment activities has been jeopardized by inadequate cost recovery andfunding by GOS. The design of th2 proposed project recognizes thesefactors.

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PART IV - THE PROJECT

45. The project was appraised In November-December 1984, and theStaff Appraisal Report No. 5639-S0, dated December 12, 1985, is beingcirculated separately. A supplementary project data sheet is attached asAnne% TII. Negotiations were held In Paris, on November 7 and 8, 1985.The Government delegation was led by Mr. Russein elabeh Fahie, PermanentSecretary, Ministry of National Planning.

Justification and ObJectives

46. While many ongoing projects in the livestock subsecto: providesome support for animal health, there in presently no systematic approachto upgrading the national services. These services are presently notcapable of carrying out a phased program of planning, programming,implementation and evaluation required for successful and cost effectivecontrol of animAl disease. The proposed project would provide the requiredatrengthening.

47. The long-term goals of the project would be to help reduce theeconomic losses in the livestock sector which result from aniral diseases,and to strengthen the institutional capability of AED to serve the needs ofthe livestock subsector. The project would assist AND in: (i) defining acomprehensive and economically justifiable animal disease control programfor the northwest regions; and (ii) testing such a program on anoperational scale. The project area, defined as the Awdal, Galbeed andTogdheer Regions, has been chosen because of the large proportion of thenational livestock herd (particularly of small ruminants) found in the areaand its significance as a major supply area for the livestock export tradewith the Gulf and Middle East countries. The project would becomplementary to ongoing projects aiming at animal health improvement inthe area, notably the USAID assisted Livestock Marketing and HeAlthProject. It would be consistent with the phased approach to Animal diseasecontrol that has already been adopted under the Central Rangelands Project(IDA Cr. 906-SO). Furthermore, its results would serve as a basis forplanning further improvements in veterinary services in northern Somaliaand the country. In this sense, it would serve as a pilot project.

Project Description

48. The project, to be implemented by a Project Management Unitwithin AND would (i) strengthen disease investigation and livestock healthservices planning (Part A); and (ii) implement, on a pilot scale, a diseasecontrol program in the project area (Part B). Part A activities wouldextend over the entire six and a half year project period but would beconcentrated in the first three and a half years (Phase I), and would aimat the formulation of a comprehensive disease control program for theproject area. The implementation of a pilot program for disease control inthe project area (Part B) would be initiated during the second balf of theproject period (Phase II). The scope, detailed design and justification ofsuch a program, to be proposed during Phase I, would be subject to a

- 12 -

Mid-Term Review (MTR). To facilitate the implementation of such a programthe project would provide a Development Fund to be used for thestrengthening of delivery systems for veterinary services. The individualproject components of the project are described in the followingparagraphs. 1/

Detailed Features of the Project

49. Laboratory Services (US$1.2 Million). The space and facilitiesof the existing laboratory at Hargeisa are inadequate to support theproposed broad disease investigation program. The project would thereforeprovide for (i) the construction of a new central veterinary laboratory atHargeisa, and the rehabilitation of the existing laboratory at Burao toimprove the regional diagnostic capabilities of AHD; (ii) the services ofan expatriate senior laboratory technician; and (iii) financing ofincremental local staff costs and operating costs for laboratory services.The selection of the site for the new laboratory would be finalized byDecember 15, 1985. Transfer of land for the project's use for thelaboratory and for expatriates' housing would be a condition of CreditEffectiveness.

50. Field Services and Investigation (US$2.7 Million). To strengthenAHD's resources for veterinary disease investigations in the field, theproject would provide for technical assistance services, transport,equipment, supplies (including drugs) and financing of incremental staffcosts and the rehabilitation of a small number of AHD veterinary districtoffices. The disease investigation program would rely on specimens andinformation collected by two Veterinary Investigation Teams with twoadditional mobile teams for range and pastoralist systems investigationsoperating parallel.

51. Training (US$0.1 Million). overseas training would be providedfor a total of nine staff of AED through scholarships and short-termprofessional courses. The training would focus on the areas of veterinaryeconomics, epidemiology and animal health planning. In-service training ofSomali veterinary and other staff would be provided regularly throughoutthe project period through the services of the expatriate advisors.

52. Project Management Unit (US$ 1.5 Million). The project wouldprovide quarters for internationally recruited advisors, vehicles, officeaccommodation, office furniture and equipment. An internationallyrecruited technical advisor to the Project Director satisfactory to IDAwould be employed. In addition, 20 man-months of short-term consultancieswould be financed.

I/ All amounts shown are baseline costs in October 1985 prices.

- 13 -

53. Technical Assistance.2/ The project would provide for about 30man-years of internationally recruited consultant services satisfactory toIDA, to assist AHD in designing and implementing the investigation program,translating results into recommandations for disease control strategies andprog-ams and for supervising and monitoring the implementation of a diseasecontrol program (Part B) during Phase II. The indicated complement ofadvisory services is the minimum considered necessary to effectively carryout the identified tasks. Terms of Reference for the consultants have beenfinalized and early GOS action to recruit the above consultants would becritical for the initiation of the investigatorial program. It would be acondition of Credit Effectiveness that the Government has completed thecontractual arrangements for at least six consultants.

54. The Development Fund for Strengthening of Veterinary FieldServices (US$3.4 Million). The program for strengthening veterinary fieldservices, would be financed through a Development Fund and implemented overa three-year period (Phase II) with details to be determined through )TR.It would be likely to include support to AHD's veterinary field service inthe form of vehicles, equipment, and rehabilitation of district officebuildings. It would also be expected to provide technical and financialsupport for the establishment of private sector veterinary and drugdistribution services.

Project Costs

55. The estimated total project cost, including physical and pricecontingencies, is US$11.6 million of which 91 percent would be foreignexchange. Items procured under the project are free of duties and taxes.The cost estimates are based on November 1984 figures updated to October1985 baseline prices. Physical contingencies for civil works and equipmentand vehicles are estimated at 10 percent. No physical contingencies havebeen provided for international and local staff salaries or training.Price contingencies have been estimated from the expected annualinternational and local inflation rates. Base costs are estimated usingthe exchange rate US$1 - So.Sh. 42.00. Total project costs including pricecontingencies reflect further expected devaluation of the local currency.

56. Detailed estimates of project costs for the strengthening ofveterinary field services (Part B of the project) would be prepared for theMTR. It is expected, however, that these costs would be contained within atotal cost of US$4.8 million, including physical and price contingencies.The amount has been determined at a level which at this stage is consideredappropriate to permit an initial testing of a disease control program Inthe project area and which would be consistent with an IFAD contribution ofUS$4.5 million for financing of estimated foreign exchange costs. An

2/ The costs of these services are included in the cost estimates shownabove for the respective project components.

- 14 -

advance under IDA's Project Preparation Facility (PPF) of US$200,000 net ofduties and taxes has been requested by GOS. The PPF would cover the costsof (a) technical assistance to prepare design and tender documents forcivil works, vehicles and equipment; (b) procurement of the first batch ofvehicles and office supplies and equipment to support early activation ofthe Project Management Unit; (c) costs for recruiting the TechnicalAssistance Team, and training of key project staff. The advance would berefinanced under the proposed IDA Credit.

Proposed Financing

57. The financing of project costs would be as follows:

Proposed Financing Plan(US$ Million)

Foreign LocalExchange Currency Z of

Cost Cost Total Project Cost

IDA 4.3 - 4.3 37IFAD 6.3 - 6.3 54GOS - 1.0 1.0 9

Total 10.6 0.8 11.6 100

58. IDA financing (US$4.3 million), would meet the costs of theinternationally recruited advisors, training, and refinancing of theProject Preparation Advance, all under Part A of the Project. The proposedIFAD loan of US$6.3 million, to be made available to GOS on terms similarto IDA would (i) finance the foreign exchange costs of civil works,vehicles, equipment, supplies, incremental operating expenses of theproject (US$1.8 million) under Part A ; and (ii) through a Development Fund(US$4.5 million) finance the strengthening of the veterinary field services(Part B) during Phase II. Effectiveness of the IFAD loan agreement wouldbe a condition of Credit Effectiveness. The GOS's contribution would beabout US$1.0 million, equivalent to 9 percent of project cost.3/ It wouldfinance local expenditures for minor civil works and incrementii localoperating costs.

3/ Based on token estimates of local and foreign cost elements for Part Bactivities during Phase II.

- 15 -

Project Implementation

59. Project organization and ianagement would be structured toinvolve primarily existing staff resources of AND in the project area,increase the efficiency and motivation of staff and ensure that when theproject terminates, activities initiated under the project are continued aspart of a regular AHD program. The responsibility for projectimplementation would be assigned to a Project Management Unit (PNU) whichwould be located in Hargeisa but which would be reporting directly to theDirector of AND in Mogadishu and a Project Committee to be establishedwithin M1Ru. The PMU would include the Technical Assistance Team, beassisted by short-term consultant services in specific areas ofinvestigation and supported by an Inter-Regional Committee, and seek theactive involvement by livestock owners and traders in project planning andimplementation. Consultants would be recruited according to IDAguidelines.

60. Project ManagMent Unit. The PMU, headed by a Project Directorassisted by a Technical Director, an internationally recruited animalhealth economist, would comprise three sections during Phase I of theproject: Field Investigation, Laboratory Services and Administration.Veterinary and laboratory staff currently employed in AND's RegionalVeterinary offices in Hargeisa and Burso would be assigned to PMU. DuringPhase II an additional section would be created for the implementation ofthe disease control program. The organization, staffing and operation ofthis section would be determined as part of the MTR. The establishment ofPMU and the appointment of a Project Director would be conditions of CreditEffectiveness 4/. Special efforts would be made to retain keyprofessional staff assigned to PHU, and staff trained under the project,throughout its implementation period.

61. The Inter-Regional Committee. To secure cooperation of otherGovernment and non-Government regional institutions, one of the Governorsin the project area would chair an Inter-Regional Comittee (IRC) with theProject Director as the Committee Secretary. The IRC would convenequarterly, and have as other members regional representatives of theNational Range Agency, a representative of the Animal Production Departmentof MLFR, AnD's Regional Veterinary Officers in the project area, theTechnical Director of PMU, and representatives of livestock owners andtraders. The IRC would be formally established by September 30, 1986.

62. The Project Committee. Project implementation would besupervised and monitored by a Project Committee (PC), to be establishedwithin MLFR. The PC would be chaired by either the Minister, Vice Ministeror the Permanent Secretary of MLFR and include the Director of AwD andrepresentatives from the Planning, Research and Training Department, theNational Range Agency and other appropriate agencies. The PC would reviewquarterly PMU's progress reports and initiate or direct PMU to take actionto overcome any bottlenecks that might impede timely or effective projectimplementation. It would also serve as a coordinating unit for all

4/ Actions expected to be completed by December 31, 1985.

- 16 -

projects in the livestock subsector. The establishment of the PC would bea condition of Credit Effectiveness.

63. Involvement of Livestock Owners and Traders. The project's deepinvolvement with the nomads would require a forum to discuss the nomads'views on existing and proposed delivery systems for veterinary services.To this end, P14U would organize by region, periodic assemblies of livestockowners and seek the involvement of livestock traders particularly inmatters relating to planning drug importation and distribution. The PMUwould prepare a plan for the organization and interaction withassemblies or groups of livestock owners and traders which would recognizethe particular problems in administering livestock health services causedby the mobility of the target group. Such a plan would be submitted toIDA/IFAD for review by November 30, 1986.

64. Mid-Term Review. The purposes of the MTR would be to: (i)review the results of disease investigation and livestock health servicesplanning activities carried out under Phase I; (ii) appraise proposals fora disease control program in the project area; and (iii) formulate adetailed plan, including objectives, activities, costs and institutionalarrangements, for the implementation of such a program during Phase II.Recommendations by MTR for the use of the Development Fund to supportproject activities during Phase II would be reviewed by IFAD which wouldapply the following criteria in deciding, in consultation with IDA, on therelease of the Fund:

(a) The main features of a cost effective and economicallyjustifiable disease control program have been identified.

(b) Outstanding organizational and management deficiencies within AEDcan be adequately addressed and remedied during Phase II of theproject.

Cc) The implementation of a proposed disease control program wouldnot be rendered ineffective by outstanding sector constraints,including those related to export market outlets and availablerange resources.

65. The MTR would carefully examine the relationship between exportmarketing prospects for Somali livestock, projected availability of feedresources on ranges and increases in livestock numbezs expected fromimproved health services to determine whether proposals for a diseasecontrol program are compatible with the objective of sustaining the rangeresources as a source of livestock feed. To this end, PC through PMU wouldensure that the necessary liaison be maintained with the USAID LivestockMarketing and Health Project and in particular that the results of themarketing studies of this project be incorporated in MTR. The MTR asstructured above, would be completed by December 31, 1989.

66. Project Allowances. Project activities would be conducted inremote locations and under harsh conditions. The morale of AND staff inthe project area has been suffering from low salaries and allowances. The

- 17 -

project would provide for: (i) an inducement allowance to P(U staff whichwould substantially raise salaries compared to the current basic malarieapaid by lLFR; and (ii) an increased per diem allowance while on field tripsto be reviewed annually in light of the civil service structures forsalaries and field allowances. Proposed salary and allowance scales wouldbe submitted as part of the annual work program and budget. Sustainabilityof these financial inducements would depend on the agreement of MLFR tocharge p"storalists for all services rendered for their exclusive benefitby veterinary staff. These arrangements would be finalized at the IZR.

67. Drug Tmportation and Distribution. During Phase I, a limitedamount of therapeutic drugs would be required to support the diseaseinvestigation program. Drugs would be distributed to livestock owners freeof charge in return for cooperation received. Procedures for drugimportation and distribution required during Phase II to support theimplementation of a disease control program would be recommended by PMU forreview by MfR. Proposals for private sector drug distribution to beprepared by PMU would address organizational arrangements for importationand financing and onward distribution.

68. Administration. Because of the remoteness of the project areaand poor communications with Mogadishu, effective and timely projectimplementation would require autonomy of PKU in handling projectadministration matters, including direct access by PMU to project funds.To assist PNU in its financial control of Phase I project activities, theservices of the Financial Controller attached to the ongoing IFAD and IDAsupported North-West Agricultural Development Project would be obtained ona time-sharing basis. The MTR, in drawing up the implementation plan forPhase II would make appropriate recommendations for further strengtheningof administrative and financial control assistance to PMIU.

69. Annual Work Programs. Annual work programs covering all projectactivities would be the basic management system for the project. Theywould set targets within the context of overall project objectives andidentify methods to be employed and resources required to achieve them.The annual work program would enable PC to review progress, examineproposed activities and make the necessary arrangements for budgetary andother support. It would be submitted to PC by October 1 and to IFAD andIDA by November 1 each year for acceptance to cover the following fiscalyear. The initial work program would be prepared by August 15, 1986.

Procurement 5,

70. Contracts for vehicles and prefabricated buildings totallingapproximately US$1.1 million would be grouped where possible in contractsvalued at US$100,000 or more and procured by ICB in accordance withIFAD guidelines. Laboratory and field equipment totalling about US$400,000and grouped as much as possible would, because of the small number of itemsunder individual equipment categories, be purchased through

5/ Unless otherwise indicated, the values quoted are inclusive of physicaland price contingencies.

- 18 -

international shopping after obtaining at least three quotations. Minorcivil works contracts for building construction and rehabilitation with anestimated total cost of US$100,000 would be let under LCB. All biddingpackages for goods and works estimated to cost over US$50,000 would besubject to prior IDA review of procurement documentation. Other contractswould be subject to selective post-award review. The six internationallyrecruited experts, forming the Technical Assistance Team, as well asshort-term consultants, would be engaged by GOS following IDA guidelines.The services of the individual experts of the Technical Assistance Teamwould be engaged under a single contract to be awarded to a suitable andqualified institution or firm.

Disbursements

71. The proposed IDA Credit and IFAD Loan would be administered byIDA under a frame agreement. Disbursements over seven years againstproject expenditures would be made to meet 100 percent of foreign exchangecosts. The disbursement profile for all IDA Eastern Africa Region Creditsis nine years, with about 83 percent being disbursed over the first sixyears. The shorter overall disbursement period of seven years assumed forthe project is justified because funds for vehicles, civil works,expatriate services and training would be committed very early in the lifeof Part A of the project; in addition the use of the Development Fundallocation under Part B, would be identified and funds committed during thefourth year of project implementaticn.

72. Disbursements against all items financed by the IDA Credit andIFAD Loan would be based on full documentation, except the following items:(i) goods costing less than US$10,000 equivalent, (ii) incrementaloperating costs, (iii) overseas training and (iv) approved contractsinvolving individual consultants. In these cases only Statements ofExpenditures (SOEs) would be requested. Incremental recurrent costsreimbursable under the IFAD Loan would consist of the foreign exchange costelements of operation and maintenance of vehicles, buildings and equipmentprocured under the project and the cost of imported drugs. Disbursementsof funds under the Development Fund would be contingent on a joint IDA andIFAD decision to release the Fund (para 64). Necessary amendments to thedisbursement procedures for expenditures relating to Part B activitieswould be agreed upon following the recommendations by MTR.

73. To ensure that project activities are not held back by a lack offunds, PMU should have prompt access to the required funds. It wouldtherefore be a condition of Credit Effectiveness that GOS has deposited inthe Project's account with a bank acceptable to IDA an advance based on anestimated average of about three months expenditures, involving localcurrency payments, in the amount of So.Sh. 2.5 million. GOS wouldreplenish the project account quarterly at that level, or such other levelas agreed upon, until project completion. Furthermore, GOS would open twospecial accounts, one for IDA and one for IFAD funds, in foreign exchangein the project's name with the Central Bank of Somalia to enable PMU todisburse without delay. IDA and IFAD would make initial deposits into thespecial accounts of US$50,000 and US$200,000 respectively.

- 19 -

Accounts and Audits

74. The project entity would establish and maintain accounts inaccordance with sound and generally recognized accounting principles andpractices satisfactory to IDA. The project entity would provide interimand annual financial statements to reflect the financial operations andstatus of the project. An auditor's opinion and report satisfactory to IDAon the project statements and the special accounts would be provided withinsix ;;onths after the closing of each fiscal year. The auditor's reportwould include a statement on the adequacy of the accounting systems andinternal controls and on the reliability of SOEs as a basis fordisbursements. Independent auditors would be acceptable to IDA.

Environmental Impact

75. Additional pressure on range and feed resources could be adverse;hence, the critical need to increase offtake for domestic consumption andexport when the disease control program improves livestock productivity andsurvival. The formulation and implementation of a disease control programfor northern Somalia would be linked to the objective of maintainingsustainability of range resources. The project would establish and operatea Range Monitoring Team within PMU and enlist the cooperation of theNational Range Agency in the monitoring of range conditions in the projectarea as a normal part of GOS animal health and range control programs andas a mechanism for permanent feedback into planning of disease controlinterventions. GOS trade officials and the USAID financed quarantine andmarketing project are specifically addressing the issues of exportmarketing to increase offtake as improvements in animal health servicesresults in reduced losses and increased productivity. These developmentswould be closely followed by the Project.

76. No toxic elements would be applied to the land. All veterinaryvaccines and drugs, to be clearly marked, would be for animal treatmentonly and their use would have no adverse effect on humans. Whensuccessful, a disease control program would have beneficial effects onhuman nutrition and health and would improve the financial lot of livestockproducers.

Monitoring, Evaluation and Reporting

77. Overall monitoring of project progress would be theresponsibility of PC. Duiring Phase I PMU would establish a comprehensivedata base covering epidemiological, economic and other informationpertineat to disease investigations and livestock health servicesplanning. A plan for monitoring and evaluation of the disease controlprogram in Phase II would be prepared by PMU and reviewed by MTR.

78. The PHU would prepare and submit quarterly progress reportsthrough PC to IFAD and IDA according to an agreed format. A reportcovering the findings of Phase I activities and detailed proposals forPhase !I activities would be submitted by PHU to the same agencies bySeptember 30, 1989. Agreement by GOS mn the timing and specific areas to

- 20 -

be covered by the report wes reached during negotiations. The PMU wouldalso prepare a project completion report no later than six months after thecompletion of the project.

Benefits

79. The project would aim at strengthening AED's technical andorganizational capabilities in planning animal health improvement innorthern Somalia. Such strengthening, leading to the formulation andimplementation of an economically justifiable and cost effective diseasecontrol strategy, would in the longer term result in benefits to thelivestock subsector in the form of reduced economic losses of livestock andlivestock products due to animal disease. They would translate intoincremental earnings of livestock owners, pastoralist households andlivestock traders, as well a6 increased foreign exchange earnings to thecountry.

80. Incremental project benefits would start accruing under Phase IIof the project with the implementation of a disease control program. Theyare at this stage not quantifiable since (i) there is an absence ofreliable baseline data on livestock mortality and mrbidity rates in theproject area (to be remedied under Part A of the project); and (it) theywould be dependent on the nature and scope of the disease control prograuand its associated investment and implementation costs which would bedetermined as part of project activities during Phase I. Thus, the projectas proposed does not lend itself to an economic rate of return analysis atthis stage. However, such analysis would form part of MTR.

Risks

81. Basic risks inherent in the project are:

ka) Border Security. Minimization of this risk Is the function oflocal government and police and armed forces and includes prudentreporting and prior clearance of staff movements in sensitiveareas.

(b) Herd Movement. Contacts may be lost with predesig4ated herdsselected for monitoring and control. Remedies would includebranding or tagging of selected herds and appointment ofpara-veterinary personnel to live with migrant owners.

(c) Staffing. Because of the remoteness of the area, harsh workingconditions and distance from the main seat of power andpromotion, it is difficult to attract and retain qualified localstaff over the long term for project implementation. Theproposed salary incentives and the provision of facilities andtransport should help to ameliorate this problem.

(d) Market Outlets. A successful animal health disease controlprogram resulting in reduced mortality and morbidity couldjeopardize range resources and increase drought risk if not

- 21 -

accompanied by an increased offtake for internal consumption orexport. The GOS, with support from a USAID funded project, isexploring increased, diversified market outlets to minimize therisk of overstocking and range degradation. The proposed projectwould have little or no impact on the size of animal herd duringthe investigatory stage (Phase I). Furthermore, even if aveterinary services stage (Phase II) were to prove highlysuccessful in controlling disease, it is unlikely that therewould be any rapid build-up of numbers in the face of the normalover-riding factor of low nutrition and poor general husbandry.However, following MTR, release of funds for a disease controlprogram under Phase II would be contingent, inter alia, on GOSdemonstrating the ability to raise livestock exports to levelsoffsetting livestock increases resulting from improved animalhealth services, drawing on the findings of the USAID study.

PART V - RECOMMENDATION

I am satisfied that the proposed credit would comply with theArticles of Agreement of the Association and recommend that the ExecutiveDirectors approve the proposed credit.

Attachments

A. W. ClausenPresident

December 12,1985Washington D.C.

4~~~~~~~~~~~

a2a

. ._ - 23 - Annex ILLJi. Page 1 of 7

WIgstkIU.I~ ~ RECENT lIIW l -- --

E6TINTE& 00UN IN9N MAnIC *1NVS6V55a

OWES OMiTS M36) .. M..O230. 236.6 1063.#

(KILOSAIS 0?f UZI. NQUhALbht) 11.0 25.0 15.0 62.2 561.3

1M2 SD 123.3326=

mowuun a (w.hf.am ) 2430.0 246.0POUZATIONWID:l Crd=N) 24SL0 34L0 bO .1313 POPlAWhW ng TO tAL) 17.3 23.1 32.3 20.1 32.0

nPguunz ponenP0MATI D In TM1 2000 CUL) 6.3

STAlS1IIOULAIO (WILT.) 31.0POIUTACOU "Olow= L.9

wO 1 0uaTsC II atn.nx SQ. M. 3.6 3.4 6.0 33.2 03.1M SQ. St. AGR. ULD .2 11.6 16.3 112.3 12

PaOtOATNo MMR=X CZ01=()0-14 us 44.7 *7.5 4.6 46.0 43.6

1-6 MJ 52.4 50.5 32.5 50. 51.3655 *0 A 2.7 1.9 2.6 2.9 2.7

stun moz r 1TOML 1.8 3.3 3U 2.6 2.9031*3 0.9 6.3 3.6 6.4 5.1

cm= am1 aum (ITWO) 50.1 50.1 u.s 47.2 *7.0WS mm USt (Mt MU) 23.9 2S.3 20.3 17.3 13.0

Cmo _ Saonuno IATZ 3.2 3.2 3.2 3.3 3.

LOUOS 433231 (tD0) .. .... 1 UiCndIEoiU n[ (tOM) .. .. 2.0 3.3 6.

TM AnaniFnMU Of wroaD uzOO6 ax CAPITAC1969-71-100) 97.0 1o.0 *0.0 63.3 U9

CZ w orIoumUt) 76.0 70.0 94.0 67.7 965C(am U VA) N 7.0 51.0 68.0 51.9 35.4

or 3R5 ANU. SMD 1U3 7.0 40.0 38.0 1t 1i7 0.5

cma CAM 1-4) us am 3a.9 35.1 30.0 23.1 16.6

L1 ElECT. AT CU M) 35.0 37.2 44.3 47.6 SL0DIWAS ICM . RAI CM15' 20) 175.0 153.5 142.0 119.3 106.6

TOTAL t5.0 33.0 A 2.1 42.R .. 17.0 36.07j 63.5 67.3

U3AL . 14.0 21.6 A 19.3 3S8

A==S TO IC&DXSOUIL(Z Of ImATIS)

TOTAL .. .. .- 26.3 2s6VIM*3 .. .. .. 63.4 57.7

SODA! .. .. .. 20.6 2M?

iOiLATIUS it amXCA 36570.0 26230.0 15630.0 4 27901.7 11791.7PO. 115 0331N0 i330 410.0 4570.0 2550.0 JW 30L64 245a.8VW. "a ROSPITaL M

TOTAL 690.0 71k.0 h0.0 aIC 1273.6 982.1D lUNAR 140.0 300.0 . 426.2 368.8

Ula 5640.0 7400.0 .. 3292.3 4371.9

AssIu PMK HSeIL MM 27.2

0Imes=LaISE= SE OF OUOSUOIf

TOMaL ..aS ........

EZUAL .. .. 35.5 3/c

LARSAg NO. 0F WUSOShiS*tlTUL .. ......WU1* .. .......A ....

WhiZw or fUILIS XX CRC!a.TOTL .. ...

_a .. _

.~~ .. _

- 24 - Annex IT A H L R A Page 2 of 7

SOMALIA - SOCIAL INDICATOrS DATA SNHSTSOIALIA REFERENCE GROUPS (WIQIT AWRGS) Is.

MOST (MUST RECw SSuT) /RECERT LW lNCUS AFRIA MIDLE lDCLL

196igw 19701b. ESThIA SOUH OF bANARA AnRCA S. UF SAHAA

ADJUSTED ENKDOLIMET RATIOSPRIIAL: TOTAL 9.0 11.0 3U.U Id 67.8 95.7

MALE 13.0 17.0 38.0 d 77.6 100.0FEMALE 5.0 5.0 21.0 i;r 54.9 83.2

SECONDARY: ITOAL 1.0 5.0 11.0 7d 13.5 17.3MALE 2.0 8.u 16.0 71 17.9 25.0FEMALE .. 2.0 6.0 Id 9.1 14.8

VOCATIONAL CZ OF SECONUAIW) 26.4 3.1 17.6 /d 13.2 5.9

PUPIL-TEACHER RATIOPRIAIW 29.0 33.0 33.0 /d 44.9 41.1SECONDARY 20.0 24.0 21.0 7d 27.4 25.5

COI_rCFTONPASSENGER CARSITHOUSAND POP 1.1 2.0 .. 3.8 20.8RADIO RECEVERS/THOUSAND POP 9.8 14.4 25.9 55.8 107.3TV RECEIVERS7THOUSAND POP .. *- *- 2.6 20.8NEUSPA ("AILY CENtRAL

INTEREST") CIRCULATIONPER THOUSAND POPULATION O.8 1.4 .. 5.0 18.4

CINEM ANNUAL ATENDANCE/CAPrrA 0.6 1.4 .. 0.5 0.4

LAt RVol=TOTAL UAEOR FORCE (TUlOUI) 1007.0 1331.0 1a15.0

FEMALE (PERCENT) 29.4 29.0 28.0 34.2 36.2AGRICULTURE (PERCENT) 88.0 85.0 82.0 /d 77.5 54.5INDUSTRY (PERCT) 4.0 6.0 8.O 7d 9.7 18.3

PAErTCIPATION RATE (MERCENT)TOTAL 41.1 38.5 35.7 39.3 36.8HALE 58.7 55.2 52.3 50.9 47.1FEMALE 23.9 22.0 2u.6 28.1 27.2

ECONOMIC DPEPNDENCI RtInO 1.2 1.3 1.3 1.3 1.3

TJ DIfRInUTIONPERCENT OF PRIVATE LIONERECEIVED 8

RICHEST 5S OF ROUSEHOLDS ..HIGTHESr 2O0 OF HOUSEOLDS ..

LOWEST 20Z OF HOUSEHOLDS ..LOWES? 401 OF HOUSEHOLDS ..

ESTIMATED ABSOLErE POVEny IECOM?LEEL (USS PER CAPITA)

RBNa .. .. 150.0 le 165.5 5Y0.7RIRAL .. .. 110.0 95.0 275.3

ESTIMATED RELATVE POVEr INCISELEVEL CUSS PER CAPrrA)

URBAN .. .. o5.0 1 113.1 545.6RURAL .. .. 50.07 67.6 201.1

ESTIMLED POP. MEI ABSOLUTEPOVERITY INCOME LEVEL (S)

URBAN .. .. 40.0 Io 36.6RURAL .. .. 70.0 7w 61.8

NOT AVAILABLEDOT APPLICABLE

N O T 1C S

a The grp averages for each indicator are populartlnrvlfed arithmetic asons Oanrqs of cinatrlaSamong the indicators depends on avilability of data ad Is not uniform.

/b Unless otherise noted. "Data for 1960r refer to any year betwee 1959 ad 2961; 'Data for 1970" betmn1969 and 1971; snd data for "fot Recent Estiate" betwen 1981 nd 1983.

/c 1977; /d 1980; le 1978.

JUhR* 1985

- 25- Atex IPag 3of 7

DUINTKOS OF SOCIL INDIC&TOUNOW Ailfbugh l datsa m dawnit m mum gpnrllyjudped hb mit atomus med nerUeable. It boM aWm ke noed thdaty mayn he lumAlonaly-mPMWb be of the bck d sma.durdl delales ma e ncou ue by delm aemm Is olhenug *A d. Td e dw netauhdail.e. wdumb o rdereof magtude i1mma.and uamrmam u mjodi -ne betwe counaaThe re ipawn pf r iI I Ike em county go of tile eu11t country and 12 a meauy go with mbwham Nohr awrp im1m than b e_ryStomp of_hembjtcrryt_ teepr -Hlgb lnm l Obpoer proup wre -Mld u tdd e In ae h AflAcad Mdl KW Is ch.esbe_ _due ofeWor

Issmhubd afImt [a Lbe bmfcr vnp dwa dwc 6"r an pepWul uen d mgnic _sm for siel MdM ad e oly whl amprwyn munartewo m a vngroup daa or that lmOlemr. Enneetcoverpae fomseangmIne lndlaoends on aewmalltyordtaand 1et uniform

I creIon mlUm te ebre m relsungsinru ete o ne Isdlmzor to maletr. ibm avaae aeonly useul in toapnlrng th v1m ou oder Idlcarate a elm mntng! e coutry ad 0r re m

AREA (thousad sq.kmH Cruder hi Ra (per hoisad)-Numbar of live births in the year

rasaI-Total surfacama compnsifng lad ara and inland watem per tbound of mkid-yar popuatiOI 10. IM0 and I9 dat1960. 1970 and 19S3 datL . Cmd DOet Aso (pr rhowasil)-Number of daft in th yer ,.

Apkiebral--Estimate of aricultural usd empomrily o per thousad of mid-year popplaonw IffO,M and 1913 data.PEimnMy for cropL pastures. market and kihen grdens or to Grm rpAdu A _-Averge number of daugh mnlie filow. 1960. 1970 and 1982 data, wi bear n bar mal productive piod if dh expaien

present ag4pecilk fentility rae: usually fiv-yar averages endingGCP PER CAPITA (USS)-NP per capia etmat at curnt in 1960.1970. .d 1913.market prices, calculated by same convemson method as World Fmg A.... I 1 qts A.me, asiailr--Anal numn-Batn Atlas (19B143 basis)j 1983 datL b c ofbirb-controldevices under auspicesornational

LNERGY CONSUMPIMON PER CAPITA-Annual appart mulv planing proanmconsumption of commcdil primary enry (coal and lignite. Fib Pbssmhr ws (p,eajfavkd mwaee-Thc peren-petroleum. natural ps and hydro-. nuclear and geoemal luc- tage of male wmef childbering age who ane pnrtiin ortrcty) in kilom or oil equivalent per capita 1960. 1970. and whose husbands are practiig any form ofconttaedo. Women1982 data of child.bearing age ar gnmely women aed 15-49. although for

some countrie contaceptive usae is meaured for otkr agePOPUATION ALND VITAL STATSTCS grouLpsTota Pt983a des.Md-Yar ftieasasj-As of luly 1: 1960. 197. FOOD AND ZNUITRIONand 1933 data.

UrSa Ayaamua(perear f taaf)-atioof uban o toai IdezfFbaedivedaeie wmCapiea(1969-71 -160)--Idex of perUrhw Popmhdi fintin of uRaaro of urban to total capita annual productuon of all food commodities. Prod euonepndatior: dHint dchtions of urban areas may affect emepar- xcludes animal reed and sed for agriculwc. Food commodites

abilky of data among counrines 60. 1970. and 1913 data. ichlde pnrmay commodities le. sugarcane intead of supri

popatd p which are edible and contain nutuients tes. coffee nd te arePopdarfoa in yea 2000-WThe projection of population for 2000. xuludedl. rhey comprise cereals. root Crop5. puLes. oil secds.made for each economy separatelv. Startng with information on vegetables friis, nuts suparcane and suipr beet livestock. andtotal populaion by age and sex. fcrilit ras mortaity mrs. and livestock products Aggega producton of each country is basedinteraiona migration n the base year 1980. thee pameters on national average producer price weighs: 1961-65. 1970. andwer projected at five-year intervals on the basis of geneaized 1912 dat.

unprs undl the population bacame sonar. P C-pit- S&pp of CalaDias (pwrcet qfeqeir- ni-Cosput-Sonayvpopulton-lIs one in which ay and sex-specific nor- ed from calorie quivale of net food supplis available in countrtaliy r have not changed over a long priod. wle age-specifc per capia per day. Available supplies compnse domtic produc-feblity rats have smultanously remined at replacement lve tion. imports less exports and cAage in stok Net supolies(net reproduction rate-;). In such a populaion the birth rae is xclude animal feed. seeds for use in agricultur quanti ued inconstant and equal to the death rae the age structre is also food processg. and losses in distribuion. Requirements wer,constant. and the growth rae is zero. The staonary populaion estimated by FAO based on physiological needs for normal aczivitnsize was estimated on the basis of the projected characteristics of and health considering environmental temperatur bodv weights.the population in the year 2000. and the rate of decine of fertility age and sex distribution of populationL and allowing IO percent forrate to replacement lkvd. waste at household level: 1961. 1970 and 1912 data.PopsJd. Mom -ts the tendency for population growth to Pfr Capmr Sapply of FPora (pane pef dAy -Protein content ofcontinue beyond the tiut tha replacement4evel retity has been per capit net spply of food per day. Net supply of food is definedachieved: that is. even after the net reproduction rate ha reached as above. Requirements for all countries esablished by USDAunity. The momentum of a population in the yaw t is measured as provide for minimum alowances of 60 grams of total protein pera ratio of the ulima stationary populaion to the population in day and 20 grams of animal and pulse protein. of which 10 gramsthe year r. given the assumption that ferility remain at replae- should be animal proein. These standardsarc lower than those ofment tevel from year r onward. 1915 data 75 grams of tot protein and 23 gams of aimal protein as an

Pwopar.. Djjsi;j averag for the wordd, proposed by FAO in the Third World FoodPer sqJkm.-Mid-ycar population per squac Idtometer I 100 bec- Supply: 1961. 1970 and 19S2 datmtares) of total arca 1960. 1970. and 1913 data. Ar Came hwrm Supply Flam Ami ad hire-Protein supplyPer sqkm agrkcrdhrltu rd-Computed as above for agrcultural of food derived from animals and pulses in grams perday. 1961-65.land only. 1960. 1970. and 1982 dat. 1970 and 1977 dat.

Poplari.n Ag Stuciwe (p5rert)-Children (0-14 yars). work- Ch (geg -4j Dath Re(pe r_adj-umber of deaths ofing age (15-64 years). and retired l65 yesrs and over) as percncage chiltdrn aged 14 years per thousand children i the same ageof mid-year populaton 1960. 1970. and 1913 data group in a givt year. For most developing countries data derivedP &palkrien Growth Rate (pereenri-rowea--Annua1 growth razes of from life tabies 1960. 1970 and 1913 dat.tota mid-yr population for 1950-60. 1960-70. and 1970-83. HEALTH

PIpaSae Growt Rate (percrst)-.rtaw--Annual growth rates Life Expecramcy at Birt fewsj-Number of years a newbomof urban popuation for 1950-60. 1960-70. and 1970-83 data infant would live if prevailing pattems of mortlity for all people

-26- Annex IPage 4 of 7

at mb tini of of its birth wem to stay the sae throughout its life Pup-.eacher rtati - primy. mid secondary-Toal students, en-1940. 1970 and 1983 daa. roled in pnmsry and secondary kvels divided by numbers ofliuf a,mEt RAm (pff thaamd).-Number of infants who die teace in the corresponding level.before reaching one yr of ae per thousand live births in a givenyear; 1960.197 ad 1913 dat. CONSUMFrIONAce Re Si* Wow (puce of jepold1eu-4etld. wha, ad vJser C's Imr amswd peJindea)-Pssenger car com-rual-Number or people itote!. rbui and rural) with reasonable piw motor can ating 1s than cight persmo: excludes ambul-accsSto sae water supply IXciddes treated surrfc wae or accs. hearses and mdiniry vhcles.untreated but uncontmnted wsier such as tha tfm protcted Rado RAeivers rpmr ths dpepuladonj-A tllypes aof reeiversborhole sprins and sanimry weils) as percentages of their repec- tor radio broadcasts so general public per thousand of population:tive populions In an urban arma a public fountin or tpost excludes un-licnsd remvmrs in countrie, and in yern whenlogmed not more than 200 mc-rs from a house may be c o istration of raaio sets was in effec data for recent years maya being withio rceonable acces of that house. In rural es not be compaable sin most countries abolished licensing.reuomabic le would imply that !e housewife or member of thehouseihold do not have to spend a diproportionate pan of the lay TYVRret lVr(pr r _pepu -T n reeives for broadcastm f ching the funily waur ueea. to gcneral public per thousamn population: esclud unlicensed TV

fething the ly f rtetd. urban raeceiven in counts and in yea when registration of TV sem waAmcsi to Exuam Disposa (Percenrt of pou d.jtel ra, in enfecLmd ma l-Number of people (total. urban. and rnal) serwved byesenea disposal as paeensgo of their respective populations. "Ppuer O dl (p tosadpopularap-Shows the aver-Excrm dipsl may include the collection and disposal. with or age ciculation at dally genral interest newspae" defined as awithout tement, of human excreta and waste-water by water- peridical publinaton devoted primarily to recording general news.borne sysm or the use of pit privies ands rinlai It is conerd wo be -daily' ifit appeas at ls ftour tmes am we.Auph_a. pr Physiiaw-_Popatiton divided by number of prac- CGemaa Ama! Aaendau per Capia eo Yea-Based on theoing phyins qualfied from amdil school at univity level, number of ti sold dunng the yean including admisions wohpakria per Narsq Pawso-Population divided by number of drive4mn cnemas and mobile unitspractn male and female graduate nurscs. assistant nOrsespractcal nurses and nusing auxiliarie.BOR FORCEkp.Iuiu. pa-r Hsital Bmi-wa!. -ab. and rar -Popalation Tot Labor Frc (hoadsi-Econorrcally acive person in-(totaL urban and rual) divided by their respective number of eluding armed forces and unemployed but excluding housewives.hbsptal beds availai in pub&iic and pate geeral and scedents. etc-. covering population of all ags Definitions inhospitals and rehabiltation centes Hospit are lvaus countses am z comprabl; 1960. 1970 and 1983 data.permanendy staffed by at least one ph l Fs prov- Fasaalk t(prcenu-Female Labor force as percentage of total laboricing prin lly cusodial cae am not included. Rural hospitals, forcehoweve incde h alth and medce not pemanenty saffed A4guca* (pacrm)-Labor force in famng forestry. huntingby a physician (but by a meic;-al stat:. nurse, midwife. etc.) and fishing as permae of totl labor forcez 1960. 1970 and 1930which offer iwpatient accommoda_on and provide a limimed rang data.of wAdical fadlit idsry (prciart)-Labor force in mining consruction. manu-Adndrshn per Hospa BRd-Total number of admisions to or factunng and electricity. water and gPs as percentage of total labordischarges from hospitals divided by the number of beds foree 1960. 1970 and 1980 dat.

Piurticoatki Rate (jecet)-total au. aadfeaa-ParticipatzonHOUSING or activity razes ar computed as totalm and female labor forceA.We Se of How%M (pera p- pkw household)-eotal -han, as percentages of ttal male and femal populaion of all ags

_drww-A husehold consists of a group ofindividuals who share respectiveiy 1960. 1970, and 1983 data. These are based on [LOashiving quartrs and thir main eals A boarder or lodger may or partcipation rtes reflecting age-sex structure of the populaton andmay not be included in the household for statistical purposL long time trnd A few estmaes are from national sourcesAvenFg Number of Pawoas pa Ro.,-toraL n_b. and rural- Emonu Depedency Ratio-Ratio of population under 15. andAverage number of persons pc room in all urban, and rua 65 and over, to th working age population (those agd 1544).occupied conventional dwelings respectively. Dwellings excludeoon-pemanent strucnues and unoccupied parts. INCOME DISTREIETIONP anrge of ODu r mfb ESw&icity-war4 urb, and ruwa- Percammage of Tota Disposabk lcu (both cas and kind)-Conventional dwdElings with eectncity in lving quarters as percen- Accrung to prentile groups of households ranked by total house-sage of totaL urban, and rural dlling respectively. hold income.

EDLCATIOiN POVERTY TARGET GROlUPSAdmid E i 2se ,, Rat- The followmng estimates arm very approimate measures of povertyPmbar shovol - road. ma mid female-r totaL r and levels. and should be Uinreted with considerable caurion.femak enment of all ages at the primary l-vel as perentages of Eruated Absohite Povrty inco Leve (I'S par cap -al rantrpe pve pmtary schoo-age populations. Wile many counnies and nawl-Absolute poverty income level is that income levdcosider primary school age to be 6-11 years. others do not. The below which a minimal nutritionally adequate dit plus essentialdifferences in country practices in the age and duration of school non-food requirements is not affordable.are releted in the ratios given. For some counlrieS with universal ui,maed Rel.v PIbea Incore Lord f G per capiak-wareducatio gros erollment may exceed 100 pe smt since some a rzr&l-Rural relative poverty incom klvel is one-tdird ofpupils arc below or abowe the countsis sandard prmary-school avergc per capita personal income of the country. Urban level isage. derived from the rual level with adjustmen for higher cost ofSecondnuy shool - towi, mae aid femak-Computed as above living in urban areassecondary education requires at Least four years of approved pr- Eummed Popeuk Belw Absolwte Pfvrty bwsco Levl (per-mary instrucsi: provides geeraL vocionaL or teacher trauning cnr)-arhan nd rural- Percent of populaion (urban and ruralinsuctions for pupils ually of 12 to 17 year of age correspond- who arm -absolurc poor.-once course ac generaly cxdcldedVocanowla Enroent (percent of secondary)-Vocational insitu- Comparative Analysis and Data Divisionuons iclude technicaL indusuiaL or other progams which operate Economic Analysis and Projecions Departmentindependently or as deparctents of secondary instutions. June 1985

- 27 -

27~~~~~~~~~~~~~

oa---f 7

ONALA COID DAM

ECOMOC Zadicatord

QG Per Caplta - US$266 (1982) 11

Aml Note of Gawth of GOPGsS NATWIOI PRODCT MT is I/l at Constt Factor cost ()

(Plmeal YTm)

lS$ Ms18. 2 1977-1 1 1982

GP at !lket Pries 1339.1 100.0 -3.0 4.4 8.5Znwestment 267.5 20.0Resource Blanc -292.6 21.9Ixport of Goods and MS 152.4 11.4Ipowt of Goods -d BFS 484.2 36.2

OUTPU IN F1f982

Value Addedusmu -

Agriculture 595.4 49.9Industry 133.4 11.2services 462.8 38.9

1249.6 100.0

CE GOVEMWI PMONCE

1979 1980 1981 1982 1983 1984(Mllo1 I So. Sh.) (Ra. Est.)

Total Revenue 1526 1421 2263 2760 4075 3971current KZPeMdture 1573 1670 2295 2750 4470 7965Currait Surplus or Deficit (-) -47 -249 -32 10 -395 -3994Other EpqgcoIituzPi 21 1684 1462 1425 2616 2097 3299Overall Defliit 1731 1771 1457 2626 2492 7293

-28- Anex ZPap 6 of I

1979 130D 11 1961 19 1if 13g B

_boduif CfU (10-b) O ' 133 114 LT 10 so

Niufata, mv1m -12 -6 -1 9 4 .43ad finm 1S, Mt

kdu um , 36 57 64 11 19 2

n - - -A - -

.a = mmlm X UD m UOUU:d a1 Md 5 143 10 57 146 177

z ssse ~~~4 - - _ _ ofl1a.t 64 ay 79 123 lC 46anc at pad t- 4 30 34 44 .4

z adds1 dm 19 V 3 -3 -14 10om]1 h1-d-2 1 -10 .4 -101

nu~~~~ wu ,masin -a

1z 1973 to Jo 30, 33 * 5.00 - b. 6.295July Is M6-3m 309 LSU A d6.1 =&V oId

s o.. 6.5 (for m_a Sqmu)w- 6 2L2590 (fwarU oP fado

Ju17 1, L92-Oct. 22, L9U - 9Sa. 15.W2-O ct. 23, L904opt. 14, L964 - o.%. 17.55

S4pt. 1, 1961-. 31, 1911 - s.ab. 26.0Jm. 1, 195 2J - So.a 36.00

7tw ip-MOMfcw 179-Si ad 1964 lInltI= P Valia lepam.

2fgsfor abinut aU lva~ts temot Is datnad in a fzm fmtip- -

- 29 -Annex IPage 7 of 7

mmED, t ND PR=I5

Dec. De. DE. DW. De. Dec.1979 1980 1981 192 193

(it h ITion o.-Sh.)

_a* Claim cn Guezt (net) 1,231 1,9w 2,250 2,100 1,809 4,378Bwk dal n Prdute Setor

ad *:buC ateprli 1,726 1,977 2,296 2,924 3,456 5,238muy awly 2,335 2,783 3,674 4,108 4,309 6,933

(Nt- . of T1M Nahmr)

ki Prloe 1 (1977-100) 136.2 217.1 33.4 384.2 54.O 1,007.0Auml Perimtap Qw4 InGmral Pu m 23.8 59.4 64.4 22.6 36.6 92.0

Buk calm Priv Secad PRbbllcx 'tpz±u 22.9 14.6 16.1 27.3 18.2 21.5

NMIy 14pp1y (MI) 35.1 19.2 32.0 u1.8 4.9 6CL9

AuE L977-79 LM 19Ms ZL I U$ Pan i in $n I s

U'veuto n71.2 74.5 101.6 76.2 98.0 85.8 106.0 mOLg9.8 1W.3 8.1 6.1 6.0 5.3 14.0 13.7

!e ad Mac Piv&mu 2.1 2.2 1.0 0.7 0.3 0.3 0.2 0.1anadSdn 5.8 6.0 6.6 5.0 2.0 1.7 4.0 3.1

PI aid Fis Picts 1.5 1.6 0.3 0.2 1.0 0.s 2.5 1.9odowS 5.2 S.4 1S.6 11.7 6.9 6.1 4.3 33

Ibtl 95.6 10.0 133.3 100. 4.0 100.0 131.0 10M.0

Pblic 1D (De. 31, l9B3)/f 1,513.9,of kieh dimbmd) 1,149.1

t V SIM RA=D

Ptubl DebtL983 (estinte)(aft w db rUef) 17.2

mL WVD (Mh 31, 1985)

Qtstamli DLasb11a 164.5Undfabarsed ~~~~~~71.1

~sadn iui. Isbu. 235.6

3/ __Iz -- sbzmd f M E ZcO,sin Cmtdes, cocmlZzg 1S. u1llaa, Iiddd3 am1noez;ect:to be dlahzud m famber.

.~~~~~~~~~~~~~~~~~~~h 1955

Annex II-30

STATUS OF BANK GRDUP OPERATIONS IN SOMALIA

A. Statement of IDA Credits (a. of September 30, 1985)

IDA Undisbureed

No. Year Borrower Borrower (US$ Million)less cancellations

Fifteen Credits have been fully disbursed 97.32

635-SO 1976 Somalia North-West Agriculture 10.0 0.06821-SO 1978 Somalia Technical Assistance 3.0 0.35905-SO 1979 Somalia Agriculture Extension 10.5 2.66906-SO 1979 Somalia Central Rangelands 8.0 1.18972-SO 1979 Somalia Bay Agriculture 12.0 7.181043-SO 1980 Somalia Petroleum Exploration

Promotion 6.0 0.101105-SO 1981 Somalia Fourth Education 10.2 3.941236-SO 1982 Somalia Second Mog. Water Supply 15.0 2.281324-SO 1983 Somalia Fourth Highway 23.0 13.631464-S0 1984 Somalia Afgoy Gas Delineation 18.0 8.691465-S0 1984 Somalia Fisheries Explo. Prom. 13.5 10.991538-S0 1985 Somalia NW Region Agric. Dev. 10.6 10.971612-SO 1985 Somalia Agricultural Input

Program 10.0 6.87TOTAL 247.12 68.90

of which has been repaid 2.27

TOTAL now held by IDA 244.85

TOTAL Undisbursed 68.90

B. Statement of IFC Investments(As of September 30, 1985)

Fiscal Obligor (Amount in US$ Mlllion)Year

OutstandingLoan Equity Total

1981 Somali Molasses Co. Ltd. 0.186 - 0.1861985 Polypropylene Bag Co. 0.605 - 0.605

Total now held by IFC 0.791 - 0.791

- 31 -

Annex IIIPage 1 of 2

SOMALIA

L.IVESTOCK HEALTH SERVICES PROJECT

Supplementary Data Sheet

Section I - Timetable of Key Events

(a) Time taken to prepare project: 24 months

(b) Project prepared by : FAO Investment Center

(c) Identification mission : October 1982

(d) Appraisal mission : November/December 1984

Ce) Negotiations : November 7-8, 1985

Cf) Planned date of effectiveness: July 1, 1986

Section II - Special IDA Implementation Action:

A PPF of US$200,000 is being processed to finance project start-upactivities (para. 56)

Section III - Special Conditions:

Conditions of Effectiveness:

(a) The fulfillment of the conditions precedent to the IFAD loanagreement. (para. 58);

(b) The deposit by the Government into the Project Account of an amount ofSo. Sh. 2.5 million (para. 73).

(c) A Project Management Unit shall have been established and a ProjectDirector with qualifications and experience acceptable to IDA shallhave been appointed, (para. 60) and contractual agreements concludedfor the employment under the project of at least six consultants(para. 53);

(d) The Government has allocated the land for the central laboratory andfor housing of consultants (para. 49); and

(e) The Government has established the Project Committee within MLFR, tobe headed by either the Minister, Vice-Minister or the PermanentSecretary of MLFR (para. 62).

- 32 -

Annex IIIPage 2 of 2

Other Conditions

(a) The PMU will submit to IDA not later than September 30, 1989,a report on its Disease Investigation and Livestock Health ServicesPlanning activities during Phase I of the project.(par&. 78);

(b) The PKU will submit to IDA, not later than November 30,1986, a plan of action for the organlzation and involvementof livestock owners and traders in the Project Area(pars. 63);

(c) The Government will establish, not later than September 31 1986, anInter-Regional Committee to be headed by one of the Governors of thethree regions in the project area (para. 61); and

(d) The Government will carry out a Mid Term Review, not laterthan December 31, 1989 (para. 65).

- 33 -

Annex IV

PROCUREMENT METMOD

S~~~~~~~~~~~~~

Procurement Methods a/Total

Project Element ICB LCB Other N.A. Cost(US$ M)

Part A:

1. Vehicles and Equipment .26 - .46 bl .11 eJ .83- s(.11 (.11)

2. Civil Works including .75 .10 - - .85pre-fabricated bldgs.

3. Operating Expenses & .25 b/ .74 .99Veterinary Drugs

4. Technical Assistance 4.10 Ce .09 el 4.19Services and StaffTraining (4.10) (.09) (4.19)

Sub-total 1.01 .1C 4.81 .93 6.85(4.10) (.20) (4.30)

Part B:

5. Expenses Under Vet. Field 4.78 d/ 4.78Services Dev. (Ph. II)

Total 1.01 .10 9.59 .93 11.63(4.10) (.20) (4.30)

a/ Figures in parentheses are amounts financed by IDA.bJ International shopping for equipment and drugs.c/ Items for IDA financing (expatriate advisory services and overseas

training) will be procured in accordance with Bank Guidelines.d/ Procurement methods to be determined as part of Mid-term Review.e' Refinancing of PPF.

K E N Y A ,

faTt~~~~P

z~~~~~~~m

-~~~~~